In today's competitive marketplace, efficiency is crucial and must be applied to virtually every part of your business. When people traditionally think about efficient business practices, they think about supply chain management or production, but there are many other processes that need to be streamlined if they can. One such area is accounting.
Accounting efficiency is crucial because businesses have to ensure their finances are organized. Merchants who can't offer efficient payment processing run the risk of losing business, because all customers want the same thing: a fast and easy way to pay for goods with little risk. Any setback that gets in the way of that could spell trouble for your organization. Following accounts receivable best practices is crucial.
That's why merchants are investing in strategies and solutions to improve payment processing efficiency. One way to do this is setting up recurring payments. This is particularly valuable for merchants with contractual agreements or other relationships without a foreseeable end date. An article in Resource Nation recently explained these details in greater detail.
"Businesses that have ongoing relationships with customers could benefit from automating their payments, saving time and money," the article says. "Paying vendors via recurring payments is helpful to many businesses. In many cases, automated payments from the ACH network have lower processing rates."
The timeliness of payments is vital. In an era where we are more concerned with our credit scores than ever before, companies know they can't afford to fall behind on their bills. If you are a merchant selling to these organizations and processing B2B payments, you know you can't afford to not get paid either, because you rely on this money to manage your own expenses. In short, recurring payments benefits both the buyer and seller by creating a stronger, more organized relationship.
The question is, how do you facilitate recurring payments so they do benefit you and your relationships with your customers? There are two standard ways to manage them. Each have merit depending on the nature of your relationships.
The first is recurring billing. This is good for processing payments from customers who only pay a specific amount on at a given time. For example, if you are a consulting service that charges $2,000 on the first of each month, you can set up recurring billing so that your clients automatically pay you that amount at that time. This can be done with card payments or ACH. It's valuable because you can mitigate the risk of your customers forgetting to make a payment, which can lead to a number of unnecessary headaches.
You may be asking, "What if my customers don't pay the same amount each month?" It's important to consider, because you don't want to lock them into a routine they shouldn't be in. For this, there is the option of repeat payments. This is for varying amounts and payment dates. While these variables will change the way you process, by collecting customer information and storing it securely you can still offer the convenience of recurring payments because they won't have to keep entering their information into your system.
Before purchasing your system, you should consider what types of payments you typically collect. At this point, working with a payments solution provider will help you acquire the best solution for your needs.